1 April 2020

How did the Ministry of Defence lose up to 660 appartments in the elite residential building?

In 2003 the Ministry of Defence signed a master contract for housing construction in Pechersk district in Ukraine’s capital (Pechersk is central and one of the most expensive Kyiv’s districts). According to the contract,  a number of residential complexes with the total area of 340 thousand square meters had to be built on the territory of the military base #2. In return, the Ministry of Defence had to receive 25% of the total housing area which is 85 thousand square meters.

Two years afterwards the Ministry of Defence signed additory contracts with the developer which reduced the proportion of appartments for servicemen and women from 85 to 51 thousand square meters. The reason for that was the developer’s letter where it was claimed that the total area of construction would be reduced from 340 to 204 thousand square meters. A proof for that was the General Construction Plan. In 2006 when all the terms of the master contract were fulfilled, the contract for termination was signed.

After that the developer worked out another construction plan where the construction area differed considerably from the information previsouly provided to the Ministry of Defence. The total area of development increased twofold whereas the number of appartments given to servicemen and women didn’t change. Thus, the Ministry of Defence lost more than 33 thousand square meters of defence housing in the elite residential complex ‘Novopechersky Lypky’.

Due to the official website of the aforementioned residential complex, the average area of a studio apartment there is about 50 square meters. It means that 33 thousand square meters could turn to approximately 660 appartments for the Ministry of Defence. But this opportunity was lost.

There are enough schemes in housing construction which could be mentioned here. Over the recent 3 years the Ministry of Defence lost more than UAH 70mln because of the schemes in investment construction only. A big number of land parcels are handed over for investment construction. But because of lack of transparency in the processes and legal gaps, thousands of servicemen and women cannot receive the housing which was promised to them by the state.

Currently there are more than 47 thousand servicemen and women in the defence housing queue. Some of them have waited for more than 20 years. The Ministry of Defence announced the plans to house them all within the next 5 years due to investment construction. However, to reach this ambitious goal it is crucial to take into account all corruption risks and minimize the opportunities for abuse. Only transparency and openness of this process will guarantee that all servicemen and women in the defence housing queue will receive what was promised to them by the state.